International Markets Provide Growing Source of Revenue for Small and
Mid-sized Companies, According to American Express Grow Global Survey

U.S. companies with global export operations consider international
sales a major contributing factor to revenue growth

September 29, 2016 09:00 AM Eastern Daylight Time

NEW YORK--(EON: Enhanced Online News)--Revenues are on the rise for small and mid-sized U.S. companies that
sell goods and services internationally, according to the 2016 American
Express Grow Global Survey. In the survey of companies selling outside
the U.S., 80% say revenues are greater compared to one year ago, and on
average, one quarter (26%) of their revenue growth can be linked to
international sales alone. Additionally, as companies forecast future
revenues, they are optimistic about exporting. Over the next five years,
more than three-quarters (76%) anticipate their revenue from global
sales to increase by about 30% on average.

“Through our Grow
Global program, we know that getting started can often be the hardest
part, but when businesses get on the path to global sales, they realize
exporting has organizational benefits beyond just revenue growth.”

While an overwhelming majority of surveyed companies (90%) agree that
international markets offer significant growth opportunities, growth
does not come without challenges. The most significant concerns for
those selling outside the U.S. include the ability to build
relationships with foreign partners (75%) followed closely by the
ability to comply with local and international law, trade regulations,
and transportation and shipping costs (each, 73%).

Businesses recognize they need help navigating challenges that arise
when doing international business, some of which include cultural
differences/different business practices (65%), political instability
(64%), language barriers (59%) and a general lack of knowledge about the
markets in which they operate (57%).

American Express (NYSE:AXP) created the Grow Global program in 2015 to
help ease business owners’ concerns, and provide valuable resources and
networking opportunities for U.S. small and medium-sized businesses that
currently export as well as those who are considering exporting.

“Our research shows that despite potential challenges, many companies
still see international business as an important growth opportunity,”
said Ed Marsh, Export Advisor to American Express. “Through our Grow
Global program, we know that getting started can often be the hardest
part, but when businesses get on the path to global sales, they realize
exporting has organizational benefits beyond just revenue growth.”

The Path to International Sales; Intentional vs. Accidental Exporters

According to the survey, most small and mid-size businesses entered
foreign markets intentionally as part of a strategic business decision
(78%), and many of them (63%) feel informed about how to conduct
international business. However, while most intentional exporters feel
informed about conducting business globally, almost four in ten (37%)
indicated they have insufficient market knowledge on exporting, meaning
they could benefit from the ability to tap into knowledgeable resources.

In contrast, as many as one in five small and mid-sized businesses (21%)
began exporting accidentally when an opportunity fell into their lap.
Comparing these accidental exporters to their more intentional
counterparts:

44% say they are very informed about how to conduct international
business (vs. 69% in the intentional exporters group)

44% say they are familiar with the markets where they sell (vs. 51%
who export intentionally)

29% say they are familiar with the culture where they do business (vs.
44% in the intentional exporters group)

To obtain knowledge about the international markets where they do
business, companies overall are most likely to rely on their network
(71%) or the websites and marketing material of potential trade partners
and customers (64%). Significantly fewer rely on data from market
research reports (54%), news publications (47%), advisory firms (40%) or
government programs (33%).

North America is the Focus of Future Investment

Of small and mid-sized U.S. companies that currently sell
internationally, sales efforts are mostly concentrated in Mexico or
Canada (43%) and Europe (29%), with much fewer selling in Asia (17%).
Mexico and Canada are the first choices (34%) as regions with the most
potential for exporting sales over the next five years, followed by Asia
(24%) – particularly China, Japan and Korea. This suggests that while
exporters are more likely to see the regions where they are already
exporting and regions nearest to home as possessing the greatest growth
potential, Asia may experience increased sales efforts in the next five
years.

Nearly two-thirds of surveyed businesses (63%) have sought financing in
order to invest in entering and growing business in these regions. Eight
in ten (82%) say they have used a variety of working capital and
receivables financing tools to supplement commercial finance products
for growth in these markets.

The Impact of Global Economic and Political Environment on Plans for
Trade

Despite the changing global economic and political environment over the
last six months, few companies say they are being cautious about their
future plans for international trade (30%). In fact, nearly four in ten
(39%) plan to increase their efforts to pursue sales internationally in
the next six months, and roughly one-third (31%) say changing global
economics have had little impact on their future plans.

However, the upcoming U.S. presidential election is one factor that may
have more of an impact on plans for international trade. Seven-in-ten
(70%) say the impact of the election will be at least ‘somewhat
significant’.

The 2016 American Express Grow Global Survey is based on a sample of 500
U.S. companies, ranging in size from $250,000 to less than $1 billion in
annual revenues, who report a portion of their company’s annual revenue
is currently derived from the sale of goods or services outside of the
United States. The anonymous survey was conducted online among decision
makers in the areas of business development, sales strategy or marketing
by Teneo Strategy August 11-19, 2016. The poll has a margin of error of
+/- 4.4% at the 95% level of confidence for the overall sample.

About American Express Global Commercial Payments

Through its Global Commercial Payments division, American Express offers
a suite of payment and lending products that help businesses and
organizations of all sizes gain financial savings, control and
efficiency. Global Commercial Payments provides solutions for travel and
everyday business spending, cross border payments, global currency
solutions, and business financing.

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